Venture capital funding to blockchain and cryptocurrency start-ups dropped by 29 per cent to $6.5 billion in the second quarter of this year amid wider market volatility and the “crypto winter” that caused prices to crash, a report by market intelligence platform CB Insights has shown.
Although funding declined for the first time in two years, the quarter’s total deal value was the fourth-largest for blockchain and cryptocurrency start-ups, CB Insights said on Thursday. In comparison, the start-ups attracted $9.2bn in the first quarter and are projected to receive $31.5bn worth of total funding this year.
While venture capitalists led the investor deal share in the second quarter, funding shifted away from centralised cryptocurrency exchanges and wallets towards non-fungible tokens (NFTs), gaming, decentralised finance (DeFi), and decentralised app (DApp) infrastructure and development, the report showed.
“Investors scaled back crypto investments due to macroeconomic pressures and concerns about crypto valuations and stablecoins,” CB Insights said.
The “crypto winter” — which caused Bitcoin to crash below the key $20,000 psychological level in June — wiped $2 trillion off the sector’s total market capitalisation, causing it to fall below $1tn.
Since then, Bitcoin, the world’s first and largest cryptocurrency, has pared back some of its losses and was trading at $23,187.16 as of 10.06am UAE time on Thursday.
Despite July’s rebound, cryptocurrency-related companies have been among the worst-performing stocks this year as investors fled risky assets, fearing that the Federal Reserve’s aggressive policy-tightening regime could tip the economy into a recession.
The collapse of the TerraUSD stablecoin and subsequent folding of companies including Celsius Network and Three Arrows Capital exacerbated these losses in recent months.
The US drove the global blockchain funding decline in the second quarter, falling 42 per cent quarter on quarter. However, the US led funding with 178 deals totalling $3.4bn, CB Insights said.
Silicon Valley was the top US location for blockchain funding in the second quarter at $937m, surpassing New York at $678m and Los Angeles with $492m.
Europe was the only region that recorded growth in blockchain venture funding and deals in the quarter, CB Insights found. It tied with Asia at $1.4bn, but was behind the $3.4bn that went to US-based companies.
Singapore ranked top in Asia for blockchain funding in the second quarter at $363m, while India ranked second after attracting $180.8m, CB Insights said.
Early-stage deals continued to dominate from April to June, accounting for 81 per cent of all blockchain funding. The average deal size in 2022 was $19m.
“Web3 accounted for over half of blockchain funding for the second straight quarter, reaching $3.7bn,” CB Insights said.
“Global funding to Web3 start-ups in 2022 already matches 2021’s total at $10bn.”
Despite a quarterly decline in deals in the NFT, gaming and metaverse category, it still attracted more than 150 deals worth $1.9m for the third consecutive quarter, the report said.
“However, the category’s future may face a tougher road ahead. NFT sales volumes are down, and Web3 metaverses face fierce competition from big tech companies,” CB Insights said.
Meanwhile, the infrastructure and development category recorded 52 per cent growth in the number of deals. The category was one of the only blockchain spaces with deal growth in the second quarter, reaching a new quarterly high of 47 deals, CB Insights said.
The blockchain industry also recorded 49 merger and acquisition exits in the second quarter, while the number of initial public offerings and special purpose acquisition company deals in the space slowed.
As several prominent cryptocurrency lenders filed for bankruptcy, cryptocurrency exchanges such as Binance and FTX sought to acquire others hurt by the “crypto winter” at a discount, CB Insights said.
Animoca Brands was the most active blockchain investor for the third straight quarter, despite a fall in its deals from April to June, the report added.
Blockchain funding from $100m-plus mega-rounds declined to $2.6bn in the second quarter. The number of mega-rounds was also down quarter on quarter, suggesting that investors were more cautious due to the recent price volatility, the study said.
There was also a 50 per cent drop in the “birth” of new blockchain unicorns, the research found.
Blockchain unicorn births dropped from a record high of 16 in the previous quarter to eight in the second quarter. The most valuable unicorn birth was Seychelles-based cryptocurrency exchange KuCoin with a $10bn valuation, while half of the new unicorns were Web3 start-ups, CB Insights said.
The US accounted for 65 per cent of total unicorns, with 46, while five were created in the second quarter. However, US unicorn births also plummeted 64 per cent during the same period, the report said.
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Five personal finance podcasts from The National
To help you get started, tune into these Pocketful of Dirham episodes
·
Balance is essential to happiness, health and wealth
·
What is a portfolio stress test?
·
What are NFTs and why are auction houses interested?
·
How gamers are getting rich by earning cryptocurrencies
·
Should you buy or rent a home in the UAE?
The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
Frankenstein in Baghdad
Ahmed Saadawi
Penguin Press
THE SPECS – Honda CR-V Touring AWD
Engine: 2.4-litre 4-cylinder
Power: 184hp at 6,400rpm
Torque: 244Nm at 3,900rpm
Transmission: Continuously Variable Transmission (CVT)
0-100kmh in 9.4 seconds
Top speed: 202kmh
Fuel consumption: 6.8L/100km
Price: From Dh122,900
Warlight,
Michael Ondaatje, Knopf
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
COMPANY%20PROFILE
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hall of shame
SUNDERLAND 2002-03
No one has ended a Premier League season quite like Sunderland. They lost each of their final 15 games, taking no points after January. They ended up with 19 in total, sacking managers Peter Reid and Howard Wilkinson and losing 3-1 to Charlton when they scored three own goals in eight minutes.
SUNDERLAND 2005-06
Until Derby came along, Sunderland’s total of 15 points was the Premier League’s record low. They made it until May and their final home game before winning at the Stadium of Light while they lost a joint record 29 of their 38 league games.
HUDDERSFIELD 2018-19
Joined Derby as the only team to be relegated in March. No striker scored until January, while only two players got more assists than goalkeeper Jonas Lossl. The mid-season appointment Jan Siewert was to end his time as Huddersfield manager with a 5.3 per cent win rate.
ASTON VILLA 2015-16
Perhaps the most inexplicably bad season, considering they signed Idrissa Gueye and Adama Traore and still only got 17 points. Villa won their first league game, but none of the next 19. They ended an abominable campaign by taking one point from the last 39 available.
FULHAM 2018-19
Terrible in different ways. Fulham’s total of 26 points is not among the lowest ever but they contrived to get relegated after spending over £100 million (Dh457m) in the transfer market. Much of it went on defenders but they only kept two clean sheets in their first 33 games.
LA LIGA: Sporting Gijon, 13 points in 1997-98.
BUNDESLIGA: Tasmania Berlin, 10 points in 1965-66
Points about the fast fashion industry Celine Hajjar wants everyone to know
- Fast fashion is responsible for up to 10 per cent of global carbon emissions
- Fast fashion is responsible for 24 per cent of the world's insecticides
- Synthetic fibres that make up the average garment can take hundreds of years to biodegrade
- Fast fashion labour workers make 80 per cent less than the required salary to live
- 27 million fast fashion workers worldwide suffer from work-related illnesses and diseases
- Hundreds of thousands of fast fashion labourers work without rights or protection and 80 per cent of them are women
What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Fixtures
Wednesday January 8 –Oman v Namibia
Thursday January 9 – Oman v UAE
Saturday January 11 – UAE v Namibia
Sunday January 12 – Oman v Namibia
more from Janine di Giovanni
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Company%20profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Fasset%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2019%0D%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Mohammad%20Raafi%20Hossain%2C%20Daniel%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%3C%2Fstrong%3E%20%242.45%20million%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2086%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-series%20B%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Investcorp%2C%20Liberty%20City%20Ventures%2C%20Fatima%20Gobi%20Ventures%2C%20Primal%20Capital%2C%20Wealthwell%20Ventures%2C%20FHS%20Capital%2C%20VN2%20Capital%2C%20local%20family%20offices%3C%2Fp%3E%0A
Engine: 5.6-litre V8
Transmission: seven-speed automatic
Power: 400hp
Torque: 560Nm
Price: Dh234,000 - Dh329,000
On sale: now
WHAT IS GRAPHENE?
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were experimenting with sticky tape and graphite, the material used as lead in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But when they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment led to graphene being isolated for the very first time.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics.
What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
PREMIER LEAGUE RESULTS
Bournemouth 1 Manchester City 2
Watford 0 Brighton and Hove Albion 0
Newcastle United 3 West Ham United 0
Huddersfield Town 0 Southampton 0
Crystal Palace 0 Swansea City 2
Manchester United 2 Leicester City 0
West Bromwich Albion 1 Stoke City 1
Chelsea 2 Everton 0
Tottenham Hotspur 1 Burnley 1
Liverpool 4 Arsenal 0
Babumoshai Bandookbaaz
Director: Kushan Nandy
Starring: Nawazuddin Siddiqui, Bidita Bag, Jatin Goswami
Three stars
UAE currency: the story behind the money in your pockets
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
